Who is in charge of the Astra Zeneca bid? The ambiguity of power in the UK

 

The legal position over this bid is very clear. Labour legislated in 2002 to stop Ministers interfering in future bids and deals outside defence and the media. In 2004 they signed up to the European Mergers Regulation, which means that larger company bids involving businesses with activities in more than one member state of the EU are under the sole legal control of the EU Competition authorities. As I put to Dr Cable, and as he agreed, the Astra Zeneca potential bid falls to be determined by the EU and by the EU alone.

However, the actual position has become more ambiguous than the legal position, thanks to the behaviour of Pfizer and Dr Cable. Dr Cable has taken legal advice and constantly stresses that he is “neutral” about the bid. He has to be. However, he has also made clear that he is looking for a role in the debate over the future of Astra Zeneca, and has been aided in this by the actions of Pfizer. The bidding company has decided that it will co-operate with the UK government regardless of the legal realities.

Their decision to do this reflects the realities of power. Whilst Dr Cable cannot block their bid, Pfizer will need the co-operation of parts of the UK government if they are to increase their presence in the UK successully. The NHS is their  largest customer. They may need planning permissions for new facilities. They may want government help with training and apprenticeships. The various ways in which a very large state apparatus impinges on a pharmaceutical company argues for a good relationship from the outset. If Dr Cable wants to discuss the future, then he will be able to. If Parliament wants to examine the issues, then Pfizer will have to put up executives to come and talk.

Pfizer may offer indications or promises on future jobs, the extent of their research commitment, and their future UK presence. These may be well meant, but it is difficult  for them to be binding. Astra Zeneca may offer something similar. As the past shows, they like Pfizer have been reducing their workforce in the face of falling turnover.

The truth is which ever management gets the prize to manage these assets in the future, they will have to adjust their plans depending on their sales and profits. We will never know whether Astra or Pfizer will keep more jobs or generate better results, because only one will win and have the chance to show us what they can do.

It is bizarre that so many UK politicians have learnt so little that they think they can second guess this deal and reach the answer which will guarantee all those jobs and facilities for the foreseeable future. The buying habits of drug consumers, and  changes made in other countries affecting their relative competitiveness, will determine whether we keep these jobs or not. The large pharmaceutical companies are having to cut costs one way or another, so redundancies cannot be ruled out whoever wins.

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81 Comments

  1. Lifelogic
    Posted May 11, 2014 at 5:48 am | Permalink

    Why on earth would Labour sign away such powers as under the European Mergers Regulation to the EU one would have to be both mad and corrupt. They were not the Labour’s powers to give away they were the voters’ powers.

    It is rather like company directors giving away half of the rights to run a company in perpetuity without consulting the owners/shareholders and even without payment.

    So why is Cameron not making this point as every available opportunity in the run up to the EU elections – because he is, as we all know of just the same, heart and soul, give our powers away, pro EU stance as Labour. He prefers just to come a poor third.

    As you say who knows who will be better at running Astra Zenica in the long run – the financial pressures and economic logic for them are largely similar.

    I must say that, judging from my parents and their friends there does seem to be a huge amount of over prescribing of drugs about, particularly for the elderly. Are we really sure all these drugs are doing any good. The danger is the doctors tell you to take something based on tenuous research done by the people selling it. It is then pushed at GPs. Often defining perfectly normal conditions as illnesses in need of correction. Once told this it is hard to go against the “expert” advice. The same applies with health and safety and other “experts”. Government even fall for the bent science and bogus exaggerations for the climate scare industry and immorally waste billions on nonsense green crap.

    We also saw governments waste million in the Tamiflu No Better Than Paracetamol? scandal. The full data from trials is not always available or public, negative outcome can often be buried.

    Does the anti-business secretary Cable actually approve of the EU having been gifted these powers? I do not suppose he will say as his heart and soul is with Cameron’s.

    • Lifelogic
      Posted May 11, 2014 at 5:54 am | Permalink

      We have ambiguity of power, ambiguity in employment laws and other laws/regulations, ambiguity between the EU and UK governments and multi level courts. ambiguity in tax laws (with the you owe what we say you owe GAAR from lefty Osborne) and absurd legal and tax complexity too.

      All is hugely damaging to industry and UK/EU investment. Endless more pointless work for largely parasitic workers of lawyers, bureaucrats and the likes. A hugely less competitive county is the result.

      • outsider
        Posted May 11, 2014 at 11:49 am | Permalink

        Dear Lifelogic, In the corporate world there is no ambiguity about where the formal veto power over large mergers lies. It is also universally known that several EU countries, most famously France, will brazenly use administrative and informal leverage to frustrate takeovers of companies they deem to be of national importance but that the UK does not*.
        Any apparent ambiguity in this country is simply a smokescreen thrown up by our political elite to cover their embarrassment at their impotence over the fate of one of our top ten companies and is purely for domestic party political purposes.

        *In this case, the UK government has tremendous leverage through the NHS and NICE but our liberal elite would consider it improper to “misuse” it.

        • Hope
          Posted May 11, 2014 at 8:14 pm | Permalink

          Those politicians who wish the UK to be in the EU want us to change from a sovereign nation to a province of the EU. By definition they cannot be patriots. Suggest readers listen to Enoch powel’s speech on Europe. Very elegant and absolutely spot on in every regard.

          It becomes very apparent that Cameron, Clegg and Miliband cannot be trusted on this issue.

    • Lifelogic
      Posted May 11, 2014 at 8:32 am | Permalink

      So our halfwitted PM want a woman to be the new head of the BBC trust according to the times. Men, one assumes, are wasting their time applying! So his halfwitted sexism is distorting a fair process already. Not that anyone ever thought we would end up with anything other than a BBC think person.

      Why not go the whole way and announce he wants a one legged, over 80 year old, gay, female, person of colour, of some exotic religion or other. It goes without saying that he will also want a green crap, pro EU, enforced equality, high tax, big government lefty.

      So the institutional left lunacy of the BBC will continue unabated. The sooner we are rid of this man the better he is even worse than Major and Heath.

      • Bob
        Posted May 11, 2014 at 4:02 pm | Permalink


        he is even worse than Major and Heath.

        He certainly seems to be doing his level best to ruin the UK.
        Clearly the Tories are in the hands of the Wets.

    • Lifelogic
      Posted May 11, 2014 at 8:48 am | Permalink

      Pathetically soft interview of Cameron by Marr this am and even more vacuous answers.

      • Hope
        Posted May 11, 2014 at 8:25 pm | Permalink

        It confirms to me that he will say anything to get a vote. He writes in his article about politicians who break their promises! How about his promise not to promote closer union with the EU? He then allows £18 million pounds of taxpayers’ money for propaganda to promote closer union with the EU and then states this is one of his seven principles he will negotiate on! How about the cast iron guarantee for a referendum on Lisbon? European Arrest warrant, he did not have to implement it to make our justice system closer to the EU. He did not have to bail out EU countries directly or indirectly, in fact he states he would not. Then there was the loan to Ireland etc. Any murmur from him about Greece, Italy, stealing from people’s bank accounts in Cyprus? It appears he has seen it as a good idea and has let HMRC help themselves to anyone’s money. He did not mention in his article how he claimed he would stop Eurozone countries from using EU institutions in his alleged veto and then never did. You simply cannot believe a word he says.

    • Tad Davison
      Posted May 11, 2014 at 8:57 am | Permalink

      ‘Why on earth would Labour sign away such powers as under the European Mergers Regulation to the EU one would have to be both mad and corrupt.’

      Well they did it with EU immigration LL, and Labour will always claim they’re not mad!

      If ever a policy wasn’t properly thought through before its implementation, it was Labour’s open doors immigration policy. Or maybe, secretly, it was thought through. They just weren’t telling us. And as one Peter Mandelson rightly says, most immigrants vote Labour. I wonder what conclusions we might draw from that inference then?

      Tad

      Tad

  2. Mike Stallard
    Posted May 11, 2014 at 6:00 am | Permalink

    “…larger company bids involving businesses with activities in more than one member state of the EU are under the sole legal control of the EU Competition authorities.”

    When Nigel Farage protested at the end of “Any Questions” that the decision about this take-over was in the hands of the EU, all three parties (including the Greens) and a lot of the audience shouted him down and the Chairman laughed him off.
    I found that very reminiscent of Churchill telling the Commons that Hitler was planning a war and giving the figures. Guess what happened?
    There is none so deaf…

    • Lifelogic
      Posted May 11, 2014 at 6:31 am | Permalink

      Indeed the BBC bias/smears against UKIP are pathetic especially their “comedy” and debate programmes.

      It is Cameron’s EU only immigration system that is clearly racists, not UKIP’s fair to all points system.

      It only seems to help UKIP anyway.

      • Lifelogic
        Posted May 11, 2014 at 12:19 pm | Permalink

        David Cameron tells Eurosceptics: trust me I get it – Well yeah sure Dave.

        The Tories have half the support of UKIP. Cameron is now irrelevant whatever lies he might decide to utter this time they are totally worthless. Unless he can somehow reinvent nearly all his heart and soul policies and do a UKIP deal that could be remotely trusted. His party is just spoiling the anti EU vote.

        He has zero credibility and is surely just history now he should save his breath.

    • alan jutson,
      Posted May 11, 2014 at 7:00 am | Permalink

      Mike,

      Ref Question time.

      Agreed, an absolute fiasco from all except one lone voice.

      UKIP could do no worse than to show this small clip as a Party political broadcast.
      with a caption.

      You may not like what he says, but he answers the question truthfully.

      He even referred to you JR in so far as he acknowledged you exposed the truth in a Parliamentary question to Dr Cable.

      • Leslie Singleton
        Posted May 11, 2014 at 8:13 am | Permalink

        Alan–Exactly right about Nigel Farage: he tells the truth and doesn’t speak out of both sides of his mouth at once. The egg throwers do not seem to be able to grasp that the publicity they give him is positive for him because most people agree with him not them on the issues they raise. The immediate goal now is for UKIP not just to come top later this month but to do so by a country mile and going away; after which roll on the by-election. This was England. And doesn’t Cameron pandering to women at every turn make one want to puke–I don’t even believe it does much good with women.

        • Lifelogic
          Posted May 11, 2014 at 7:15 pm | Permalink

          I agree most women I know are far too sensible to fall for Cameron’s Harriet Harmon think nonsense.

        • Jennifer A
          Posted May 11, 2014 at 7:52 pm | Permalink

          I cannot believe that Mr Farage has to employ body guards.

          For what ?

          For catering for what at least 30% of the population want but aren’t given by the major parties ?

          We do not live in a democracy.

          “Hope not hate” say critics of UKIP. What liars they are.

        • Hope
          Posted May 11, 2014 at 8:30 pm | Permalink

          I am beginning to suspect if placement are being put in UKIP to discredit the party. Cameron’s interview with Sky was astonishing when he spoke about UKIP, has he forgotten Mercer already or his his support for Miller? Perhaps he has forgotten what Laws did after resigning six weeks into government? If I remember correctly he warned us about lobbying, he arrogantly wanted us to to move on from Miller because he was okay with it and he wanted Laws back in Government. No need to worry about other parties when he does not show leadership or control over his own.

          • APL
            Posted May 13, 2014 at 8:07 pm | Permalink

            Hope: “I am beginning to suspect if placement are being put in UKIP to discredit the party.”

            It’s amusing to note, many of the Counsellors that have caused outrage among the liberal media and are currently in UKIP, have spent years in the Tory Party.

            Suddenly their bigotry is newsworthy, just because they have changed parties.

    • Tad Davison
      Posted May 11, 2014 at 9:09 am | Permalink

      For me, last week’s Question Time was a perfect example of what we REAL Eurosceptics have been up against for the past 40 years – lies, distortions, and misinformation. Yet those who tell it like it is are constantly being shouted down and ridiculed despite the solid evidence in our favour.

      There’s something of Cassandra in being a Eursceptic, and only when the EU chickens come home to roost, and the project tanks, are we believed and gain widespread credibility. And that is why we must try ever harder to defeat this political bias with the one big weapon we have at our disposal – the truth.

      We must leave no stone unturned in defeating this undemocratic menace that has gripped the establishment. It is a threat like no other, as it has taken hold from within. (etc ed)

      Tad

      Reply Any many of us Eurosceptics also have to face daily attacks from other Eurosceptics!

      • Tad Davison
        Posted May 11, 2014 at 4:16 pm | Permalink

        Reply to reply:

        That depends on the definition. I recall Cameron describing himself as a Eurosceptic – yeah, right!

        My idea of a Eurosceptic is one that has realised how unworkable and toxic the EU is, and wants out of it altogether. Anyone who doesn’t go along with that is fair game because they cannot defend staying in. One only has to read the very cogent and well-informed contributions to this blog to appreciate that fully.

        Tad

        • Hope
          Posted May 11, 2014 at 8:32 pm | Permalink

          Listen to Enoch Powell on Europe. It is well worth it.

        • David Price
          Posted May 12, 2014 at 7:55 am | Permalink

          The problem with ardent UKIP supporters is they cannot tell friend from foe. They attack and berate those who want the same thing.

          Perhaps if more effort was spent on describing the alternative solutions with less on the usual complaints and sometimes misdirections the journey might not be so long.

          As it is the arguments, cogent or otherwise, are lost in the noise.

      • Lifelogic
        Posted May 11, 2014 at 7:23 pm | Permalink

        To reply: But you voted for Cameron did you not? Did you really think he was sound, he is wrong on every single major issue?

        He threw the last open goal election with his EU ratting and Clegg TV, is clearly pro EU to his very core, is totally full of green crap, has made 299 tax increases, introduced more idiotic regulations, more enforced equality drivel he now he says he want a woman at the BBC as a blatant discrimination against men.

        Now he says trust me on the referendum, I would rather trust the new rent act fool Miliband at least he is openly a pro EU, green crap, socialist dope.

        Reply I was a supporter of Dr Fox

        • Lifelogic
          Posted May 12, 2014 at 5:11 pm | Permalink

          The Tory party will not elect a sensible leader like Dr. Fox as it has too many green crap, pro EU socialist in it alas.

    • Ray Veysey
      Posted May 11, 2014 at 11:13 am | Permalink

      Mike, you need to do some research on why Churchill was doing that it’s not as straightforward as it seems.

    • Denis Cooper
      Posted May 11, 2014 at 3:03 pm | Permalink

      That disgraceful little episode at the end of Question Time can be seen here:

      http://www.youtube.com/watch?v=SCSfSjM-moA

      When each of them having had their own turns to speak a Labour MP, a Tory MP, a LibDem peer and the Green MP all joined in to try to shout down Nigel Farage when it was his turn to speak.

      And what was Nigel Farage saying, which each of those four had carefully avoided saying, and which they did not want him to say?

      That the final decision on the Pfizer bid for AstraZeneca would not be taken here, it would rest with the European Commission.

      • Leslie Singleton
        Posted May 11, 2014 at 4:05 pm | Permalink

        Thank you for that Denis–I had previously missed it. What exactly did Dimbleby find so funny? This was not an election with votes: it was a matter of fact given what has been signed up to. As I see it the laughing jackasses were surprised by and disbelieving of the truth, as well they might be. Is there anything we haven’t signed up to?? God Bless Nigel Farage. And as for that creep Cameron with his mantra about protecting “Jobs and Science” with no power to be able to do so in this case, except maybe a monkey letter if he is lucky, he falls lower and lower in my eyes, at least he would if that were possible. For those that don’t know, a monkey letter (or “Letter of Comfort”) is one that makes a monkey out of you if you believe it.

        • margaret brandreth-j
          Posted May 12, 2014 at 5:28 pm | Permalink

          They were rude and condescending .The ploy is to attempt to undermine by laughing as though he was not quite in his right mind. Unfortunately my vote in his goes to him straight away.I cannot stand these smarmy persons.

  3. alan jutson,
    Posted May 11, 2014 at 6:52 am | Permalink

    So the NHS is the largest customer of Pfizer.

    I do hope that the NHS are getting good value for money when they have negotiated such purchases.

    Why is it that somehow I think the NHS may have been paying rather too much for such drugs.

    What sort of purchasing contract exists between the NHS and Pfizer, how often is it revised and is it done on a product by product basis.

    These present talks/discussions seem to have all the hallmarks of the usual nice and cozy arrangement between government and a commercial organisation, which past history seems to show the taxpayer eventually gets shafted.

    No Company can guarantee anything for the future, they can use lots of nice words like we will endeavour etc, but they can give absolutely no guarantees.

    Like wise the HNS should be constantly looking/searching for competitor providers of drugs, and is in no position to guarantee business forever.

    Whilst I am happy for the government to attempt to get assurances, the fact is they sold the rules of the game to the EU years ag, so they are really powerless to do anything.

    When will our government learn, when will our politicians understand they are simply pawns in the game.

    • Lifelogic
      Posted May 11, 2014 at 9:50 am | Permalink

      The NHS “getting good value for money” it sounds about as likely as the NHS giving good value for money. I suspect that quite a large proportion of the drugs purchased & prescribed do little or no good and often positive harm. Or they could be replaced by generic and this far cheaper ones.

      About one thousand avoidable deaths a months is it not in the NHS?

    • David Cockburn
      Posted May 11, 2014 at 11:06 am | Permalink

      alan jutson, you overestimate the power of the NHS. It represents about 4% of the world drug market, maybe less, so the impact of a sale to the NHS is of no consequence to global Pfizer. There is an impact however on Pfizer UK and on the patients who don’t get to benefit from the drugs they are denied when the NHS and NICE play games with purchasing.

      • alan jutson,
        Posted May 11, 2014 at 5:34 pm | Permalink

        David

        Not suggesting we play games with peoples treatment and lives, simply suggesting that we should drive a hard bargain when purchasing product, any product.

        I would have thought the NHS drugs budget is not insignificant.

      • Narrow Shoulders
        Posted May 11, 2014 at 7:24 pm | Permalink

        It’s only 4% of the global total!

        The leverage that I could get if I contracted with any supplier where I controlled 4% of the possible purchases.

        This is a strong negotiating position to hold without needing to play games.

      • David Price
        Posted May 12, 2014 at 6:27 am | Permalink

        is that 4% by population, revenue per head, revenue by country …?

  4. margaret brandreth-j
    Posted May 11, 2014 at 7:37 am | Permalink

    I use and can prescribe many drugs from different companies.I have choice over which brands are suitable to give for the individual patient in relation to research and individual patient status. Many drug companies visit us with their own research papers. Some make interesting reading, however what is apparent is the differences in results on the same or very similar products.The drugs market is vast .It has definitely cut back and I personally see this in the reduction of dinners , weekends away and lectures I attend paid for by the companies.Any future of any company can be manipulated and not by little Nurses like me.
    I could also say that Nurse Brandreth-Jones would also like a future role in the running of any such merger , just as Dr Cable has said , but it means little in the drugs market.

    • John E
      Posted May 11, 2014 at 8:15 am | Permalink

      I recommend a reading of Bad Pharma by Ben Goldacre for a view of the way the drugs companies operate.

      • Lifelogic
        Posted May 11, 2014 at 7:33 pm | Permalink

        Indeed much truth in that book, surprising he is so misguided on the Anth. Global Warming (the huge exaggeration of) Scam.

    • sjb
      Posted May 11, 2014 at 8:48 am | Permalink

      Margaret wrote: Many drug companies visit us with their own research papers.

      Therein lies the problem – e.g. Avandia, Vioxx, Tamiflu. For decades, Big Pharma have been rather coy about releasing all the evidence gathered from their clinical trials; in Germany there are statutory powers to demand the relevant information – but not in the UK. HMG subsequently spent £424m stockpiling Tamiflu; it is doubted the money was well spent.[1,2]

      [1] http://www.publications.parliament.uk/pa/cm201314/cmselect/cmpubacc/295/29502.htm
      [2]

  5. Ex-expat Colin
    Posted May 11, 2014 at 7:47 am | Permalink

    This certainly says it for me: “are under the sole legal control of the EU Competition authorities”

    I certainly agree with you and Lifelogic.

    Businesses don’t get up in the morning for nothing…nor does Gov for that matter. However, there is a distinct difference. The former makes money the latter hoses most of the cream taken. And ‘taken’ has become a very sinister word of late!

    We see daily the pure contemptuous behavior of may politicians and last weeks QT was but one staggeringly classic example. Cannot gain confidence in the holders of those positions at all. Don’t argue just fix it !

    This deal needs safety wrappers incorporated to prevent the bidding company reneging on any promise it makes or is forced to make. The skill/jobs must remain here and preferably under British management (the competent type).

  6. oldtimer
    Posted May 11, 2014 at 7:54 am | Permalink

    The reason for the Pfizer bid is, presumably, to seek to gain a sustainable competitive advantage. Based on experience about half of such bids succeed and half will fail. Given that so much of these global firms sales and activities are outside the UK the ability of UK ministers to affect the outcome is restricted to their influence on sales to the monopoly that is the NHS. The companies concerned will, no doubt seek to humour or at least not offend Mr Cable. To do do otherwise would be foolish. But much of the rest is so much hot air.

  7. Iain Gill
    Posted May 11, 2014 at 7:58 am | Permalink

    Re “The buying habits of drug consumers, and changes made in other countries affecting their relative competitiveness, will determine whether we keep these jobs or not. The large pharmaceutical companies are having to cut costs one way or another, so redundancies cannot be ruled out whoever wins.”
    It’s not that simple.
    Whoever owns the intellectual property for an important drug is always going to be in a powerful position, at least within those countries which respect the intellectual property rights. Drugs where the IP is still current are not being sold on price, they are being sold on the innovation and lead those drugs represent.
    But the high price is not just to fund production, it also needs to cover all the R & D of drugs which went through R & D and didn’t make the final cut.
    Re “The buying habits of drug consumers” have limited relevance where the dominant force is the medicine regulators and the medical profession itself. If the regulators recognised the higher standards routine in production here over some other countries that would help the British workers, as it is currently their acceptance is binary.
    Generic drugs where IP protection has expired are already cheap.
    Being a drug company is like being a rock band manager, you nurture a lot of bands but hope to make your money on the one band that becomes a major act.
    The UK is also disadvantaged because a lot of the production technique improvements are generated here, but the drug companies tend to pass these immediately to their other international plants. There would be some merit looking at this dynamic more closely.
    The UK government also has a lot more cards to play than you list. For instance changing the way work visas are issued could immediately improve jobs prospects for Brits within the Pharma industry, they (and their outsourcers) don’t need this many work visas they are just using them because its cheaper than employing Brits. And as I said above sales are not price driven, they are innovation driven.
    Currently the UK is being taken as mugs by big business, and our political leadership shows little sign of understanding the true dynamics or fighting for the British people.

  8. Ray Veysey
    Posted May 11, 2014 at 8:29 am | Permalink

    “It is bizarre that so many UK politicians have learnt so little that they think they can second guess this deal and reach the answer which will guarantee all those jobs and facilities for the foreseeable future”
    I find it amusing that you can say this kind of thing when it suits your argument, and not bear it in mind in other situations, for example, have you not learned yet that your efforts in the HoP regarding Europe are not working, and yet despite your sentiments above you continue with your fruitless efforts.
    (I repeat my warning that using decisions forced on the PM by UKIP as signs of your success don’t count)

  9. Bert Young
    Posted May 11, 2014 at 9:15 am | Permalink

    The legality of whether Vince Cable , or any part of our Government , can intervene or influence the outcome of the Pfizer/Astra Zeneca take- over , is not something I can comment on , however , as I have previously said , there are many issues that involve the public at large that make this take-over prospect different . The availability of drugs , how they are researched and developed , pricing and competitiveness in the Pharmaceutical industry are the key factors . The EU is more detached from our reality and their position secondary . Obviously the track record of Pfizer is of concern , and although they have made certain reassurances about keeping things the same for 5 years , dramatic changes could be made after then bringing in the “rationalisation” for which they are well known . Frankly , I would like to see all the stops and preventative measures put in place .

  10. Lindsay McDougall
    Posted May 11, 2014 at 9:54 am | Permalink

    There is nothing forcing the UK Government not to point out Pfizer’s (words left out ed) track record, and perhaps the fact that many big US Corporations behave in a similar manner with takeovers. (words left out ed) The R&D and high tech jobs go to the States and production is steadily moved from Europe to Asia. It’s much better for a UK company to be taken over by the Japanese – as our motor industry will testify.

    As for the problem with the NHS, it’s high time that we got rid of this nasty Stalinist monopoly and had a proper market in health services. Why should all decisions on health services be taken by Jeremy Hunt and his NHS colleagues? Who decided to spend taxpayers’ money on providing liver transplants for alcoholics? Who decided to provide abortions free on the NHS without making any attempt to recover the costs from the fathers? Who decided to allow one man to be treated 143 times in A&E in a single year? Who decided that a woman (from abroad ed) should be treated free of charge in one of our NHS hospitals after a skiing accident? Who decides to pay the legal costs of plaintiffs when their lawyers charge £1400 per hour – why so little haggling and fighting of claims?

    If you have a proper market in health services, the poor are screwed. If you retain this free-at-the-point-of-consumption-join-a-queue-doctor-knows-best system, everybody is screwed. By the time of the 2020 election, the fundamental flaws of the NHS will be clear to most people. We should be ready with proposals, including a better way of helping the poor.

  11. Richard1
    Posted May 11, 2014 at 10:00 am | Permalink

    The pontificating of leftist politicians and even some supposedly on the right on this transaction is absurd. If investors are not permitted to sell their ownership positions in a company unless some politician decides they should be able to, companies will not be able to fund themselves in the capital markets. AZ is already an international company, owned by international investors and headed by non-UK managers. Whether there will be more or less scientific research in the UK in the future doesn’t depend on the supposed ‘British’ ownership of this company, it depends whether companies operating in this sector, including Pfizer, find the UK an attractive and competitive place to employ people.

  12. Tad Davison
    Posted May 11, 2014 at 10:05 am | Permalink

    This is what you’ll get if you vote for Cameron!

    On his programme this morning, Andrew Marr asked Mr Cameron,

    ‘If you decided that the Pfizer bid for Astra Zeneca was not in the best interests of this country, could you stop it?’

    That required a simple ‘yes’ or ‘no’ answer, followed by a candid explanation as to why he could, or why he could not. Indeed, we all know the answer, so it would have given Mr Cameron ammunition to fire at Miliband and Labour. Instead Mr Cameron gave a rambling and long-winded spiel which was far from clear and unambiguous.

    Of course Mr Cameron knows that to answer the question honestly and directly with a firm ‘NO’ as any honest man would do, he would have to acknowledge that our host was right, as was UKIP’s Nigel Farage. so that begs another question, what is Cameron trying to hide by deflecting away from the original question?

    This is a measure of the man, so let’s be clear for the sake of anyone who still thinks that Cameron can be trusted to deliver on his promise of a satisfactory re-negotiation or a referendum. The man is devious and downright dishonest as his evasion on this and other occasions clearly demonstrates! He dare not tell it like it is, in case it goes against his mst cherished aspirations to keep Britain within the EU. And Cameron would have Clarke to answer to had he got it wrong!

    I cannot stand devious rattlesnakes, and the difference between Cameron and Nigel Farage on last Thursday’s Question Time, who DID answer truthfully, could not have been more stark.

    Tad Davison

    Cambridge

    • Leslie Singleton
      Posted May 11, 2014 at 4:18 pm | Permalink

      Tad–Pray that the people see all this, as I believe they do, and that Cameron in consequence gets absolutely humiliated later this month, possibly even to such an extent that he is forced out (Yes, JR, I know it is not likely but I believe it is just possible and in any event a man can dream). Ditto the by-election.

      • Hope
        Posted May 11, 2014 at 8:42 pm | Permalink

        I understand EU directive 139/2004 applies here. I am sure Dennis can tell us otherwise.

        The Tory leaflet in my door stated Cameron had all done all could within EU agreements to curb immigration. That was their boast. In other words Cameron cannot do anything to stop the quality or quantity of people coming here from other EU countries. He along with the other LibLabCon want the UK to become a province of the EU superstate rather than a sovereign self governing nation.

        The LibLabCon need to ship out because they are not up to the job, indeed they do not want the job of running our country. They are content to implement EU law, regulation and policy.

        • David Price
          Posted May 12, 2014 at 8:16 am | Permalink

          So does Directive 2004/25/EC dated after 139 as 21 April 2004.

          Article 4 defined the supervisory authority and applicable law of which section 2a states;

          ” The authority competent to supervise a bid shall be that of the Member State in which the offeree company has its registered office if that company’s securities are admitted to trading on a regulated market in that Member State.”

          Now, I don’t believe the EU should have any say at all, even to granting “authority” but if this directive holds sway it puts a completely different slant on what is the “truth” in this whole saga.

  13. Posted May 11, 2014 at 10:16 am | Permalink

    ‘they will have to adjust their plans depending on their sales and profits.’
    Not after Balls has nationalised them.

    • Tad Davison
      Posted May 11, 2014 at 4:05 pm | Permalink

      Oh my god. You again. Can’t you trolls leave people alone?

      Are you so bereft of a personality of your own that you have to assume someone else’s?

      This site is for serious debate, not a playground for gamers. For God’s sake pick a different name and show some individuality for once!

      Tad Davison

  14. forthurst
    Posted May 11, 2014 at 10:16 am | Permalink

    “It is bizarre that so many UK politicians have learnt so little that they think they can second guess this deal and reach the answer which will guarantee all those jobs and facilities for the foreseeable future.”

    The politicians have to maintain the pretence that they are still running the country.

    Many years of the baleful consequences of the majority of large mergers demonstrates that the only people who benefit are banksters; competition, creativity, consumer choice, employment opportunities, long term shareholders including pension funds lose out.

    Wall Street is driving corporations to achieve ever more improved quarterly results; the consequence is that short-term profits through such tactics as asset-stripping and off-shoring are prioritised at the expense of long term sustainable growth. it is no surprise then that those parts of the world not manipulated by Western banksters are experiencing consistently higher rates of long term growth whilst we experience a succession of asset bubbles and collapses and no real growth at all.

    • sm
      Posted May 11, 2014 at 11:01 pm | Permalink

      And worse i think that a war would be quite beneficial to some interests as cover , to make an escape, before a really large worldwide economic collapse and a much larger legal regulatory backlash including criminal prosecutions.

  15. Terry
    Posted May 11, 2014 at 11:05 am | Permalink

    Surely the most simple way is to legally prevent Pfizer or any other foreign company, owning more than say, 45% of Astro Z’s shares. And apply that across the board to the top 500 companies by market cap. And enforce strict regulations regarding tax payments. Such limits on maximum share holdings are practiced around the world, so why should we not adopt it here?

  16. Pauline Jorgensen
    Posted May 11, 2014 at 11:25 am | Permalink

    Politicians have a poor track record of meddling in industry – look at the service provided by many of the ‘great’ nationalised industries before privatisation and how much better the likes of BT are now. I remember waiting for months for a phone line in our first house. Mr Cable should stick to making things easier for industry by deregulation and protecting British Companies from an uneven playing field.

  17. Neil Craig
    Posted May 11, 2014 at 11:27 am | Permalink

    This is the same Cable who had to be neutral on whether Murdoch should be allowed a full takeover of Sky to expand it to be a proper competitor for the state’s BBC propagandist monopoly.

    That was just before the BBC decided to spend a month starting every edition of the news with stuff about Murdoch’paper having hacked Milly Dowler’s email and deleted messages – “news” which was much later and very quietly admitted to be non-truthful, after it had done its damage.

    I see what John means about the diffusion of state power & unaccountability of those who use it.

  18. Gary
    Posted May 11, 2014 at 12:48 pm | Permalink

    The EU is a red Herring in the big picture. Big Pharma is just like the banks, the taxpayers in the USA, Britain and probably in most other govt-corporate oligarchies, including the EU, shoulder the risk, while the corporates get the profits. (Allegation about Pfizer removed ed)

    ” every one of
    Pfizer’s patented drugs benefited
    from decades of taxpayer funds
    through the US National Institutes
    of Health , which in 2012 alone
    spent £32bn (£19bn).”

    http://www.theguardian.com/commentisfree/2014/may/11/pfizer-bid-astrazeneca-big-pharma-rotten-banks

    As usual, the roots of this convoluted situation is Big Govt rigging the playing field and reaping a mess of unintended consequences. How you can boil that down to an EU soundbite, only you will know. Never miss an opportunity to kick the EU. Govt of all stripes is the problem.

    Reply I am not kicking the EU on this occasion, merely pointing out the legal position!

  19. outsider
    Posted May 11, 2014 at 12:50 pm | Permalink

    Dear Mr Redwood, You are of course right that Vince Cable’s laudable attempts to safeguard as much UK research effort and UK employment as possible in the event of a Pfizer takeover of Astrazeneca are bound to be subject to future commercial realities.

    But I am surprised and depressed that even you seem to ignore the competition issue, which to my mind trumps any national issue in this case.
    How can a market leader taking over a healthy competitor be anything but bad for consumers and (in our case) taxpayers? Both companies are strong and immensely profitable. How can you buy the classic monopoly argument that a merger will somehow be beneficial by allowing them to cut out wasteful duplication of costs by eliminating a competitor?
    If revenue is stagnant, that is not because the market has shrunk – far from it – but simply because some companies have been unable to replace hugely profitable blockbuster drugs that are running out of patent protection. In economic terms, there has been a loss of rent. The answer should be to step up new product development, not the short-term expedient of increasing monopoly power by buying in another company’s monopoly profits (or rents).
    A vast amount of high-level lobbying is going on on all sides except, it seems, by the UK government. Surely, as the leading host country for Astrazeneca, the main effort of ministers and Parliament should be to take the lead in lobbying the Commission, the European Parliament and public opinion to throw out such a takeover on competition grounds. If not why not?

    Reply I am a competition hawk and agree if the two companies do have dominant market shares post merger this should either prevent the bid or lead to divestments. These issues will be fairly examined objectively by the EU Competition authorities. I may comment if and when there is a bid with bid documents, as I do not know the market share figures at the moment to be able to comment. The market definition is likely to be EU wide, not just UK.

  20. Brian Tomkinson
    Posted May 11, 2014 at 1:27 pm | Permalink

    JR: “It is bizarre that so many UK politicians have learnt so little”
    The sentence should end there. Most of them need teaching a lesson and I hope that will begin on May 22nd – we want control of our country back.

  21. Mark
    Posted May 11, 2014 at 2:22 pm | Permalink

    I have noted a couple of less desirable bits of business news of late: Rolls Royce have sold off their energy turbine business to Siemens (no questions in Parliament about that, I note), because the prospects here in the UK have obviously become unattractive in the light of our energy policy, which has also led to the closure of yet another refinery – this time Murco, Milford Haven, leaving us even more dependent on refined product imports from countries such as Russia.

    Do the Lib Dem ministers of Business and Energy ever talk to each other about anything other than trying to shut down Britain?

  22. Denis Cooper
    Posted May 11, 2014 at 2:30 pm | Permalink

    Off-topic, there’s an opinion poll in the Observer today which has UKIP on 20% support, and that is not for the forthcoming EU Parliament elections but for the next general election.

    http://www.theguardian.com/politics/2014/may/10/latest-observer-opinium-poll-shows-ukip-gains

    I guess that this opinion poll will prove to be an outlier, but with UKIP having added another 2% its current polling average may turn out to be about 16%, and the rise in its support is hitting both the Tories and Labour to comparable extents.

    The interesting thing is the predicted outcome of the next general election on the basis of the numbers in this single opinion poll:

    http://www.electoralcalculus.co.uk/userpoll.html

    Labour 33%, that gets them 347 MPs
    Tories 29%, that gets them 249 MPs
    LibDems 9%, that gets them 26 MPs

    But

    UKIP 20%, that gets them zero MPs.

    In fact UKIP would need to add maybe 4% more before it started to get any MPs, and even then the seats which are identified as having fallen to UKIP seem very unlikely cases.

    There is clearly something wrong with our present system of representative democracy when the political views of a fifth or even a quarter of the electorate can be completely unrepresented in Parliament.

    Curiously the chance that UKIP will get any MPs elected in 2015 is comparable to the chance that the Tory party will get an overall majority of MPs, they both need to add about 10% to their present opinion poll ratings.

    • Leslie Singleton
      Posted May 11, 2014 at 5:30 pm | Permalink

      Denis–Thank you for pointing me towards this Poll, as I would never go near The Observer, but I have to say that I believe you are not extracting enough optimism from it. The most important sentence to my mind says that:

      (Paste) UKIP are not likely to win any seat in particular, but there is a large number of seats which they have a small chance of winning if variability is included in the model (Unpaste)

      The above is obvious enough but, as I read it, the zero seats at 20% that you refer to does NOT include variability because it applies only at zero variability (ie never!!).

      At 5% variability (not especially high??) 20% indicates 7 (7.2 to be precise) seats which doesn’t sound too bad to me. Variability is what gives the LIbDems disproportionate seats and is crucial.

      Yes, JR, I appreciate that 20% is a high hurdle for a new Party in a General Election but given, as would seem likely, a modicum of variability I would bet a cheap bottle of wine that UKIP gets at least a few seats. Note (referring back to the sentence I pasted in above) this is not to say, without more, that UKIP are likely to win the forthcoming by-election, given that it is a specific seat, though of course they may.

      Reply We need more Eurosceptics in Parliament now and in the next Parliament where we need a majority, not a change of label on a few Eurosceptics in some future Parliament if UKIP eventually manages to knock over a few Conservatives. Either you agree many Conservatives are Eurosceptic, in which case between Conservatives and UKIP we have a majority of the vote and need to translate that into a majority of Westminster seats , or you regard in a purist way only UKIP as being truly Eurosceptic, in which case there will never be a Eurosceptic majority so Eurosceptics have lost.

      • Brian Tomkinson
        Posted May 11, 2014 at 7:02 pm | Permalink

        Reply to reply:
        JR: “Either you agree many Conservatives are Eurosceptic”
        How can we agree when the majority of your MPs are not? Even amongst those who might be so described many of them are more interested in sustaining Cameron in No10 than taking the UK out of the EU.

        Reply Then you will lose if you persist in criticising the people closest to your views- Eurosceptics have to work together to win

      • Leslie Singleton
        Posted May 11, 2014 at 7:19 pm | Permalink

        Reply to Reply–You said recently that you predicted that UKIP would not win a single seat at the Election. I didn’t agree with that then you will remember and I agree even less with that now. Apart from all else, the immediate aftermath of the Election is not the be all and end all. Once the dam is broken and Cameron and like thinkers are confined to history there is hope. Even Miliband is easing his way to a Referendum at next transfer of power and, although those are just weasel words to dodge the issue as long as he can, push is going to come to shove soon enough. Cameron’s twaddle is irrelevant.

        • Denis Cooper
          Posted May 12, 2014 at 8:57 am | Permalink

          Actually Miliband’s words were not just weasel words, they were also very dangerous words if read carefully. Words which could potentially spell the end of the Tory party, when its “We should be in the EU but not in the euro” position was simply not an option available on the ballot paper for a referendum and it had nothing to say during the campaign.

      • Denis Cooper
        Posted May 12, 2014 at 8:54 am | Permalink

        Yes, the model used by Electoral Calculus can only give a rough guide.

      • Denis Cooper
        Posted May 12, 2014 at 8:59 am | Permalink

        Well, JR, you have little to fear from UKIP as Wokingham would be one of the very last Tory seats to fall through the rise of UKIP.

        • Neil craig
          Posted May 13, 2014 at 12:54 pm | Permalink

          The Electoral Calculus programme has to assume an equal swing everywhere but it is no secret that UKIP are looking at what seats to target (as the LDs have done and as the figures show works). Targeting will give us seats even on 20% though perhaps not yet more than the LDs do on 9%.

          On a 10% swing (comparing with the Tories getting a majority with an extra 10%) UKIP may get a fair number of seats. However on a 15% swing (ie 35% overall) we actually get a majority of seats. I suspect that if that happens, and it is far from impossible, the LabCons will discover they actually believe in proportional representation after all.

  23. ian wragg
    Posted May 11, 2014 at 3:24 pm | Permalink

    I see that silly Hodge woman is again bleating about Amazon only paying 0.01% corporation tax in the UK on £4.5 billion sales.
    She never mentions that it is quite legal to domicile yourself in Ireland or Luxembourg to avoid tax because her and successive governments handed these decisions to Brussels.
    Why do all politicians lie and hide the truth John. We are not that stupid.
    Because big business is not paying a fair share of taxes Gideon and CMD are resorting to stealing from our bank accounts.
    Opposition looms large oh! another cast plastic guarantee from your boss. Joker.

  24. Denis Cooper
    Posted May 11, 2014 at 3:40 pm | Permalink

    “As I put to Dr Cable, and as he agreed, the Astra Zeneca potential bid falls to be determined by the EU and by the EU alone.”

    Which is the factual, legal point that Nigel Farage was attempting to make when he was shouted down by the other four panellists, parliamentary representatives of the Labour, Tory, LibDem and Green parties, at the end of the last edition of Question Time, which lead him to accuse Labour’s Chuka Umunna of either deliberately lying to deceive the public or being “pig ignorant”:

    But if that is the case, and if the European Commission OK’d the Pfizer bid, would they tolerate the UK government acting in such a way that the bid was frustrated?

    Bear in mind that through the European Communities Act 1972 the UK Parliament has foolishly elevated EU Commissioners to a legal position which is superior to that of UK government ministers; if the final decision rests with the EU Commission then under that Act it would be illegal under our domestic law for UK ministers to attempt to thwart its decision, there being little doubt that the EU’s Court of Justice would rule that it was be illegal under EU law.

    The UK Parliament has not yet elevated the EU institutions to legal positions superior to that of itself, and according to Lord Justice Laws it would impossible for the UK Parliament to do that – “The British Parliament … being sovereign, cannot abandon its sovereignty” – but it has elevated those institutions to legal positions superior to that of UK ministers.

  25. matthu
    Posted May 11, 2014 at 5:44 pm | Permalink

    Over and over again during the current election campaign we see the unedifying spectacle of politicians from three mainstream parties uniting in trying to drown out the argument being put forward by UKIP.

    Whether it is on Pfizer, on immigration, on what constitutes racism, on HS2, on the number of laws being imposed on us by the EU, on the number of jobs that depend on membership on the EU or on climate change.

    By failing to engage with the electorate they do nothing to persuade lost voters to return.

    The conundrum UKIP voters face is whether to vote once more for the Conservative Party in 2015 in order to secure a referendum or remain with UKIP which will effectively destroy the Conservative Party for a very long time.

    The trouble (as I see it) is that for all his protestations, Cameron still does not “get it” and the longer it takes him to engage properly with the arguments being put forward by UKIP, the more voters will resolve never to return.

    Reply Mr Cameron does get the need for a referendum and will provide one if he wins in 2015. Anyone who helps him lose is in effect removing the chance of a referendum, as the other likely winners are against a referendum and want to stay in the EU.

    • matthu
      Posted May 11, 2014 at 6:56 pm | Permalink

      Cameron gets the need for a referendum, but not what irritates the voter about the EU. Cameron still supports far too much Eu ideology in direct opposition to the majority of the public, and still avoids addressing the massive democratic deficit that has been allowed to develop.

      Our politicians no longer feel the need to respond to public opinion, and that’s the nub of it. That’s why the system needs to be overhauled and not merely tinkered with.

      So when Cameron talks about negotiating a right for the UK to be able to block future powers being grabbed by the EU, but at the same time is totally relaxed about powers already given away, he shows absolutely no appreciation of public concern about powers already lost.

      It makes one realise that all his posturing at the time of the Lisbon Treaty was fake. Else he would not “let it rest there”.

      • matthu
        Posted May 11, 2014 at 7:07 pm | Permalink

        If Miliband was the only party leader offering a referendum, would you vote for him? No, and neither would I. Unfortunately, I now lump Cameron in the same category.

        Somebody who quite clearly beckons the country to follow him down a dangerous path which leads to loss of more and more democratic power is someone I no longer choose to follow.

    • JoeSoap
      Posted May 12, 2014 at 2:20 am | Permalink

      Reply to reply
      More and more clutching at straws
      1 IF Conservatives get a majority and IF Cameron remains PM through to 2017 he says that he will renegotiate unspecified subjects but excluding free movement of workers and many other areas. IF these are renegotiated successfully in his view he will recommend acceptance, and if not, there is no Plan B.
      2 IF despite his recommendation and whipping all Conservatives to follow him in recommending the referendum draws a NO, he is under no obligation to remove us from the EU.

      Don’t you think it’s a little far fetched to call this the most likely route to exit, as opposed to a UKIP move to embarrass LibLabCon by a decent showing in forthcoming elections, then to hold the balance of power by 2017?

      Reply UKIP are not going to hold the balance of power in 2015 – look at the polls.

  26. matthu
    Posted May 11, 2014 at 5:47 pm | Permalink

    For many people, changing your political allegiance is like changing your bank: you very seldom hear of people reverting back to the bank they previously deserted.

  27. matthu
    Posted May 11, 2014 at 7:18 pm | Permalink

    And all this EU crap about having to fit all new cars with the equivalent of a SIM card so that they can forever be tracked and and doing this under the guise of health and safety specifically so that this legislation cannot be blocked by member government objection is exactly why we must never trust any blocking mechanism that Cameron proposes.

    The EU will simply out-maneuver him, like they out-maneuvered Major and Blair and Brown before him.

  28. matthu
    Posted May 11, 2014 at 7:28 pm | Permalink

    And a question for every Conservative Party candidate:

    We all understand that polygamy is unlawful in this country. But is it still morally objectionable? And if so, is it only morally objectionable while it remains unlawful or does it suddenly become acceptable if the law changes?

  29. sm
    Posted May 11, 2014 at 11:08 pm | Permalink

    There is nothing the 3 main parties can say on anything. They are ALL simply untrustworthy.

  30. David Price
    Posted May 12, 2014 at 6:59 am | Permalink

    Is it solely an EU decision now? I thought the test of public interest still resided with the UK government (Competition and Markets Authority) – https://www.gov.uk/government/organisations/competition-and-markets-authority/about.

    Reply The public interest test is limited to media, defence and banks

    • David Price
      Posted May 12, 2014 at 9:06 am | Permalink

      Thanks for the reply- that would be the set of three areas the minister referred to in parliament. When this was passed in parliament do you recall what justification was used to make it such a piecemeal arrangement, why not do all or nothing?

  31. mike hughes
    Posted May 14, 2014 at 7:20 pm | Permalink

    I have been involved in takeovers both as predator and pray, up to £2B; so not as large as this one! Nevertheless there are some unchanging facts. You cannot trust anything that the bidder says. Managers who make promises are easily overruled
    by others in the business and the profit motive always comes first.
    Companies have centres of gravity and hearts no matter how many areas they operate in; and no matter where the company is domiciled for tax reasons. Pfizer’s centre of gravity and its heart is in the USA. In difficult times its managers will favour the USA, no doubt about it, and the UK will lose. Tax domicile can be changed easily if some better offer comes along. Five year promises, even legally binding, mean little. It will take five years anyway for them to figure out the big moves anyway so it hardly slows them down in reality.

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  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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